25’000 years ago our ancestors invented Gods, and Deities. They came in all their forms – the stars, the sun, animals, stones, trees, altars, temples, and even druid priests wearing horse heads with antlers.
Belief and believers
They believed in these Gods.
Our ancestors were willing to part with offerings of something valuable – animals, food, or a virgin, in return for the promise of some reward down-the-line. As long as people “believed” in the promise, that God was valuable.
Most religions started with no believers. At their peak they had 100% believers. More believers in a God, the more powerful he became. Not every God made it. There were sometimes just too many of them. If a God wasn’t going to draw in the crowds, his best bet was to affiliate himself with the one who was. Then he could call himself a messenger, prophet, priest, or whatever was needed to get holy status. He could become an “Alt-God”, just like the real one, but promising faster results.
There were many competing Gods. The ancient Greeks seemed to invent them all the time. We had Gods of fire, wind, stars, rivers and the sea amongst dozens of others. It was tough to choose which one to worship. A God with no believers was worthless. The safest strategy was to believe in the most valuable God. As a general rule, it made sense to go with the crowd. Believe in the same one that everyone else believed in.
Worshipping the wrong God could mean death. When a religion got going, it generally didn’t do you any good to say, “It’s a crock of shit. I don’t believe”.
The early believers were the survivors. The trick was to get on the bandwagon early, and start preaching. Better still, make sure you are the one who had a vision. Be the one hears God’s messages. Get in the loop so you can pass the messages backwards and forwards between the people and God.
Whether the Gods of our ancestors were invisible or intangible didn’t matter to our them. All they had to do was believe. Some may have called it irrational. Some thought the God to be useless. Some dared to call him a “fraud”. Generally they were put to death.
Belief is all they needed to make their God valuable. The belief could be exchanged for future salvation or a more immediate blessing.
Believing in the intangible today.
Today we believe in the value of a lot of irrational, intangible or fairly useless things. Examples are rare paintings, gold bars or a fistful of paper dollars. All of them are intrinsically worthless. We can’t eat them. They won’t keep us warm. If you were the only person on a desert-island, these things would be worthless.
Leonardo da Vinci’s “Mundi” painting.
Recently a painting supposedly by Leonardo da Vinci sold for nearly half a billion dollars? What made that piece of canvas and paint worth more than the lifetime of pleasure that half a billion dollars could buy? What made the buyer or the seller want to own those worthless dollars in the first place? The’re only digits in a bank balance. What’s the point of a bank balance? It’s only digits in the ether.
What makes a painting worth £45 in 1958, $10’000 in 2005 and nearly half a billion dollars in 2017? Did the value of money decline that much? Or did the number of believers in the painting’s value rise?
The seller of Leonardo’s “Mundi” only needed only two believers with deep pockets. He found them both. The auction winner was the one with the deepest pockets.
There are only 200 da Vinci works of art in existence. Not everyone can own one. The number of believers in his value just went up. It’ll cost you more than the price of a palace to buy the next one. At least that’s what I believe.
Gold
Why is gold so valuable? We dig it out of one hole, only to bury it in another. The Krugerrands above may look like money, but you’d never buy a cup of coffee with one. Is it the cost of mining which makes it valable? Or is it simply the “belief” that it’s a store of value?
If you can exchange it, then it’s valuable.
The value, today, lies in exchangeability. We “believe” we can exchange those dollars, the Leonardo, or a bar of gold for something we need or want. We “believe” that everyone else – or at least someone “believes” in it. Like the ancient Gods, as long as there are believers, there is value in these useless assets. You only need just one person to “believe” in the value of your asset.
Important (How to earn some money)
I want to reward those who actually read my blogs. If you would like me to reward your comment, just add the word “hodl” in your comment.
Important (How to get flagged)
On the other hand, if you are just fishing for votes, or trying to get noticed, without reading this blog, just add some inane comment like “great post”, “upvoted”, or “thanks for sharing”, without joining in the discussion, without adding any value to the debate, and either I, or one of my followers, will flag you.
Important (How to earn money by flagging spam-comments)
In the interest of rewarding those who take the time to weed out comment spammers, leave a comment to the spammer explaining why you flagged him and I will reward you for that comment too, and I will reward you for any other comments against flags you leave elsewhere. Please flag any spam comments, or at least give the spammer a warning.
Bitcoin
Now to bitcoin. It’s like your bank balance. It has no intrinsic value. You can’t touch it, eat it or wear it. You can’t even look at it. It’s as worthless as that fistful of dollars, – unless you can find someone who wants them.
Bitcoin only has a value if the next guy believes it has value, and if he will take it off you, giving you something you want in exchange. If nobody believes in it, then it’s worthless.
As of today, bitcoin does not have very many believers – only one in 800 adults own any bitcoin. The unanswered question is “Will it stop here?”.
Will bitcoin be like the trees the druids worshipped? When the believers died out, they burned the tree to keep warm.
Will bitcoin become gold 2.0? Will people start to “believe” that it is a store of value?
If, like some of the ancient religions, this bitcoin is a big one, if it will become gold 2.0, then it will pay to get on the band-wagon early.
There is only a limited number of bitcoins. There will never be more than 21 million of them. Nearly 17 million have already been mined. It will take 100+ years to mine the remaining 4 million.
Do you believe that all millionaires will eventually want to own a bitcoin? There are less coins than there are millionaires. They can’t all have one. Just like the Leonardo, they can’t all own one.
If, tomorrow, the government decides they don’t like that millionaire, they can freeze his bank account. They can’t freeze his bitcoin. Does that make bitcoin more valuable than the bank balance?
What about you? Do you want to own a bitcoin?. If you “believe” that there will always be others who “believe” in it, then you had better hurry up while you can still afford it and while you can still get one.
If the number of people believing it is a store of value grows, so will its value.
To me what backs a cryptocurrency is the absolutes of mathematics combined with
1)Utility
2)Usability
3)Scalability
For these reasons my trust is not on BTC but Alt-coins that are far more scalable and provide a wide range of services (say.... EOS or NEM) or provide the same service faster, cheaper and privately like Dash, PIVX, XVG.
The only advantages BTC has got are brand and wider merchant adoption. Out of "Currencies" my definitive HODL is Dash.
I agree that there are lots of alt-coins which claim to have faster transactions and more scaleability than BTC.
I really don't think any one is buying BTC, Dash or anything else with the idea that one day they will buy a cup of coffee with it. They think of it like Gold and Silver. They just want to own it, and that's it.
That'd be like only using the internet for E-mail and web pages. Blockchain is a quantum leap similar to the dot-com boom-bust-prosperity. Dash and similar products will make banking look like professional photography. Banks will exist but will cease to become a major part of the economy. An even better analogy would be the British Royal Family.
I've gone on record saying BTC will be under $500 before the end of 2020 and BCH will stabilize over $1000 before 2018. I made the call right after the fork. Let's see how things will turn out to be. One thing for sure is that mobile payment processors will be DEAD!!! They are not banks and they are expensive, centralized, hackable and less cool.
Time will Tell.
regardless of ideology, if bitcoin is to replace traditional forms of currency, each bitcoin will need to be valued (using traditional dollars as a comparator) at $476,000 dollars.
There is currently $10.5 trillion USD floating around the world (based on M2) and with a max of 21 million bitcoins its an easy division.
Governments cant freeze bitcoin? Naive in the extreme, governments can 'freeze' people thus having the same effect. Bitcoin is NOT a redistribution of wealth, its a transfer of wealth and like any form of wealth, those who have the most have the power, and power is a much more valuable commodity than any form of currency.
Its power that needs distributing, to people with responsibility and ethics...none of whom appear to be the greedy, Lamborghini driven 'traders' of the crypto age.
Great post ! best wishes and keep writing :-)
@nathen007 (40). You make some great points. The government can freeze people. They can take your bank balance. The good news is that when they “un-freeze” you 2 years later, your bitcoin will still be there and it will be worth $476’000.
However, I think you are wrong to use M2, unless you believe bitcoin will only be useful as a future currency. If, instead, it becomes a store of value, / gold 2.0, , then you should use some percentage (e.g. 2%) of the other stores of value, like stocks, property, bonds and gold. You will certainly get a much bigger number.
Hodl
I believe there are believers, believers that will never die.
Let me share an example with you:
Two years ago, when I was in 2nd year of my college, I heard about bitcoin somewhere on the news.
I began to read stuff about bitcoin and that only resulted in growing interest.
At that time none of my classmates knew about bitcoin.
It was in the beginning made an account on a local exchange and invested all I had (It was like 100$).
I sold my bitcoin when it reached $500.
I used to tell my friends about it but none of them seemed interested but when I showed them the results, suddenly every one of them bacame interested and decided to invest.
Atleast 20 of my friends and classmates joined the revolution and invested in btc.
And those 20 friends brought some of their own contacts to invest in btc and of course in alt coins as well.
What I am trying to say that though the number of bitcoins is fixed but the number of investers are growing rapidly and that makea me think that btc is here to stay @swissclive
Great post
Thanks for sharing
Just kidding! 😂🤣😂🤣😂🤣
hodl
It’s anazing just how much perception has to do with what we see as being wealth, isn’t it?
I had someone I know about a week ago say Bitcoin was a scam because ‘it’s not backed by anything’.
Can you believe this belief of perception?!?!?!
Does he not realize that fiat currency is only backed by the word of a central bank?
What is the word of a central bank worth?
NOTHING
Yet he has 100% confidence in accepting my fiat currency for buying his goods, yet no confidence in my Bitcoin.
Let’s see which one out of the two of us is wealthier in 5 years.
@shaungerow (47) Take a roomful of non-bitcoin believers. Explain what a Casascius bitcoin is. Tell them that it is worth much more than a bitcoin. Show everyone a Casascius bitcoin. Wave it in the air. Shout “Hand in the air - anyone who wants it!”
It will demonstrate how easy it is to turn non-believers into believers.!
Amazing article might slap awake a few people I like how you mention that we believe in a alot of things that in reality dont actually have any real value not only that but they do nothing for us instead we have been lead to believe these things actually hold value good wakeup call @swissclive
I think this is one of the best post I've read on steemit. I liked the part of how you make the comparison of believing, religion vs value of the BTC. It's important to believe in something. and more if that something offers some kind of hope. hodl . the faith without works is dead, the btc without believers is dead.
very interesting your explanation to explain Bitcoin, you are right, everything that advances or has a great value, first you need to believe in that, I believe in the God who made the heavens and the earth, the only true one, and since this year 2017 I have I believed in this cryptocurrency, which has changed the economy of people a lot, to see this, it is going to continue to advance and we must take advantage of this opportunity to save on it. Hodl, Saludos amigo!
Human nature to hodl something. Whether gods gold or btc.
“hodl”
You have made a good comparison between belief, unique and future value. It is true that the value of Bitcoin depends on people's faith, I think that now that it has exceeded $ 10,000, Bitcoin is unstoppable.
If Bitcoin disappears, all other cryptoids will disappear. There is too much risk that Bitcoin is not accepted in all countries of the world, banks, etc. Only now people start to believe in the power of Bitcoin and new currencies. Everything has its value, Leonardo Da Vinci was an outstanding artist, precisely because they believe in his art, it is worth $ 500,000,000 .
I believe Bitcoin will be worth at least 200,000 - $ 1,000,000. Thanks for amazing post @swisslive
I believe in you. I believe that you will reward me, because I am a hodl.
But seriously, you write about very interesting things that few people think about. Based on your text, we should make the world believe that the Steam is more valuable than bitcoin and we will all become millionaires. Though it looks ridiculous, but it's theoretically real :) Thanks for the interesting blog, I'll probably take it for a re-read, it's only your second post that I saw.
This post is pretty awesome. Resteemed since I think it'll help a lot of people grasp the big picture and find some solace for the future, as long as people continue believe. Well written with plenty of analogies and parallels to keep me drawn in. You spent a lot of thought into writing this, and I appreciate it!
Wow, that is one serious amount of gold, partially shown. I'd hodl that as well as your BTC.
Gold is only valuable because the government has prohibited its mining. The amount needed for electronics is negligible. Bitcoin believers? I think people need more than pure greed but historically that has always worked, Bitcoin will evolve or be conquered.
Interesting. Many disagree.
Interesting point. Gold is also problematic as easily-mined gold is no longer possible in most places. To extract the remaining gold, creates significant environmental harm from acidification and toxic mercury releases.
This might also be counted as spammy comment
Thanks @swissclive I want to make a small point about bitcoin but i will come back to that later. Some background first. I have recently bought into the cryptocurrency idea. Actually it was getting on to steemit that was the driver.
Three things came together to open up the idea.
I received a congratulation from Google that my photo on GoogleMaps had been viewed 43000 times. I checked my other photos and several had over 20000 views. My photos were clearly valuable to Google.
I saw a youtube post about Facebook. Why has a non-producing organisation have a market captalisation of nearly 500 billion dollars? That values the information from each "member" at around 20 dollars of which I didn't receive anything except the joy of using their platform.
So I was receptive to the "get paid to post" claims for steemit.
Consequently I read up on cryptocurrency and bitcoin and have bought a small stake.
I think one of the risks that people discount with bitcoin is the "can't shut down the internet". Unfortunately that is not true. I lived in Egypt during the revolution in 2011 and the first thing that happened was the Egyptian Government shut down the ISPs and switched off the mobile networks.
In the company I worked with, we tried to use satellite communications but that was unreliable and difficult to maintain.
Governments do have ways of breaking the system. At least you still can have the wallet somewhere though you might not get to access it.
In any case my bitcoin strategy is to pound cost average with a small amount and hodl as you mention.
At the moment it's an upwards elevator. we shall see.
HI @swissclive , interesting post here. In my opinion, as i am new to crypto-currencies, i take the word of people who are close to me who believe in this movement. Like you said, once more people follow suit, the higher in value it becomes. I would like to own a bitcoin and I also do believe in the movement, a shift from the dollar system that we have that is clearly not working out for the "better" of humanity. I still do not know exactly how it will be beneficial but for starters it might give the people more control and exchanges would be much easier n personal. What do you think?
We had no idea how the www would work out in 1995. Today we don’t know the future, but there is bound to be some good stuff.
Yes bound to have good stuff, i just wonder if the "elites" will once again take control of the situation or maybe that doesn't matter this time, just concentrate on yourself plus i don't want to be too skeptical about it all.
Not only exchange. Durability is also one of the major factor, you want to have the money/currency useful even after few years, and if it's not relevant at that time, you can't use it as currency.
Just like these credit card reward points and all. What makes a currency currency is whether it'll be relevant a century after it was acquired or not. Can we be sure about it in case of bitcoin?
Please don't SPAM... take a look in this before hurting your reputation.
https://steemit.com/steemit/@miti/newcomers-minnows-and-spammers-this-post-will-save-your-reputation
I didn't get the chance to delete the comment once I came to know that it was considered a spam.
I don't want to go into details how someone posting "Informative Text" image is not a spam. But, saying it's a good post and I've appreciated the post by upvoting is spam.
The only thing I'm saying is, as per https://www.steem.center/index.php?title=Flag, The author should be given sufficient time to respond and correct their mistake or prove ownership of the content. And as I couldn't delete my comment, I corrected it by editing.
It's just that it's very generous of you to flag a corrected comment.
YES, i was very generous to flag you at only 10% (which means less than 0.01 SBD and no effect on your reputation) and give you the possibility not make that mistake again ;-)
Do not make such spammy comments, you'll be flagged
Thanks for the information, had seen many such comments on few other posts. Guilty sorry and corrected.
Next time read the blog on which you are commenting. I know you did not read it, because if you would have noticed the paragraph headed "Important" you would not have done what you did! Before you edited it, you wrote "Nice Post". That's exactly the kind of words to get you flagged.
@miti downvote
great post !!!
Please don't SPAM... take a look in this before hurting your reputation.
https://steemit.com/steemit/@miti/newcomers-minnows-and-spammers-this-post-will-save-your-reputation